CBI forecasts weak economic growth in 2010
The ever-growing release of negative data on the UK economy continues this morning with news that the Confederation of British Industry (CBI) believes that 2010 will be a "sluggish" year for the UK economy and we will not see a real recovery until 2011. This is yet another bitter blow for the UK government ahead of this week's budget and ahead of the next general election. So why is the UK starting to weaken?
The CBI believes that a number of stimulus programs introduced by the UK government, which have come to an end, will impact upon short-term growth. The VAT cut and the car scrappage scheme are just two of a number of financial stimulus programs introduced by Gordon Brown which had a very positive impact upon the UK economy. However, there is concern that the UK economy is not yet strong enough to take up the slack now that these stimulus programs have ended hence the forecast of sluggish growth in 2010.
There is also growing concern regarding the UK budget deficit and the CBI believes that the government's books need to be balanced by 2015/16 which is two years earlier than Gordon Brown has predicted.
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